Numbers reveal how bad NYC's property taxes are

A coalition of real estate developers and civil rights groups have filed a lawsuit to force reform of the city’s unfair property tax system, charging it is illegal and racially discriminatory. No one disagrees that it is unfair—not the mayor, not the speaker, not anyone I know—but some argue that eliminating the huge breaks it gives homeowners would be counterproductive.

For context, check out a nationwide report on property taxes issued this week by the Lincoln Institute of Land Policy. It has some eye-opening comparisons of New York with other places around the country.

Consider:

New York City has the biggest property tax rate discrepancy in the nation between single-family homes and apartment buildings, with the latter taxed five times as high. It is the 12th consecutive year New York has led this dubious list, and the table shows how much worse New York is than the other top five cities.

City

Tax ratio

New York

4.97

Columbia, S.C.

3.72

Indianapolis

2.60

Birmingham, Ala.

2.17

Charleston, W.Va.

2.11

Apartment property taxes in New York are higher than anywhere else as a result. The table below compares New York with other cities that have the highest effective tax rates in their own states based on $600,000 of property value.

City

Apartment tax rate

New York

5.47%

Detroit

4.97%

Aurora, Ill.

3.81%

Bridgeport, Conn.

3.59%

Des Moines, Iowa

3.05%

Because New York gives such special treatment to homeowners, it taxes commercial property owners heavily to make up the lost revenue. Here are the five highest effective commercial property tax rates for the largest city in each state.

City

Commercial tax rate

Detroit

4.09%

New York

3.93%

Chicago

3.86%

Bridgeport, Conn.

3.81%

Providence, R.I.

3.71%

These figures are powerful evidence that the system harms too many people to continue as is.

Crain’s New York Business is the trusted voice of the New York business community—connecting businesses across the five boroughs by providing analysis and opinion on how to navigate New York’s complex business and political landscape.